The present invention is directed to vibration monitoring systems, particularly systems for use with large rotating machinery. Known vibration monitoring sensors for large rotating machinery, eddy-current proximity displacement probes and spring-coil velocity transducers, are hampered with intrinsic errors lessening their effectiveness in providing diagnostic warning or data for balancing and accurate rotor deflection monitoring to determine approaching internal contact between rotating and stationary elements thus protecting against rotor damage during start ups. For example, eddy-current proximity displacement probes may suffer from electrical run-out, magnetic run-out, surface irregularity (dents, scratches, grooves) spiking, and ill-defined calibration. Spring-coil velocity transducers suffer poor low speed outputs, mechanical resonance, and difficulty with coupling to a rotating shaft without use of a contacting shaft rider which itself is spiked by surface irregularities. Therefore, there exists a need for a monitoring system having a sensor void of the aforementioned errors to thereby adequately protect and analyze major rotating equipment, such as but not limited to, steam turbines, combustion turbines, generators, fans, compressors and the like.